Public Storage 2003 Annual Report Download - page 42

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clarification of EITF Topic D-42 (described above), from $14,835,000 in 2001 to $6,888,000 in 2002, which was
due to a lower level of preferred stock redemptions in 2002 as compared to 2001. Diluted weighted average
common equivalent shares outstanding totaled 124,571,000 for 2002 compared to 123,577,000 for 2001.
Included in the distributions paid to our preferred shareholders during the year ended December 31, 2003,
is approximately $3,087,000 paid to our Series W and Series X Preferred shareholders. These two series of
preferred stock were issued during the fourth quarter of 2003, raising aggregate gross proceeds of approximately
$252.5 million. Our intended use of the net proceeds from these issuances is to fund the redemption of two series of
preferred stock (our Series K and Series L) that occurred during the first quarter of 2004. In the interim, the net
proceeds from these issuances earned nominal interest income relative to the corresponding dividend requirement.
This difference resulted in an estimated reduction to earnings per common share of approximately $0.02 per share
(on a diluted basis) during the year ended December 31, 2003.
During the first quarter 2004, we issued approximately $152.5 million of additional preferred stock in two
separate transactions. The net proceeds from these issuances will be used primarily to redeem approximately $86.0
million of higher rate preferred stock during the third quarter of 2004. In the interim, the net proceeds from these
issuances are expected to earn nominal interest income relative to the corresponding divided requirement. This
difference will result in an estimated reduction to earnings per common share. In addition, we may issued up to
$400 million of additional preferred stock during 2004, raising the necessary funds to redeem additional high rate
preferred stock during the first quarter of 2005. These issuances similarly will have a negative impact on earnings
per share until the proceeds are utilized.
Real Estate Operations
Self-Storage Operations: Our self-storage operations are by far the largest component of our operating
activities, representing approximately 91% of our revenues generated during 2003. Rental income with respect to
our self-storage operations has grown from $719,765,000 in 2001 to $761,446,000 in 2002, representing an increase
of 5.8%. In 2003, rental income grew to $798,584,000, representing an increase of 4.9% over 2002. The year over
year improvements in rental income include changes in the performance of those properties that we owned
throughout the three year period and the increase in the number of properties in our portfolio either through our
acquisition or development activities.
At the end of 2000, we had a total of 1,240 self-storage facilities included in our consolidated financial
statements. Since that time we have increased the net number of self-storage facilities by 134 facilities (2001 - 22
facilities, 2002 - 103 facilities and 2003 - 9 facilities). We sold five facilities in 2003, and their revenues, cost of
operations, depreciation expense and net gain on sales for all periods presented are reported as Discontinued
Operations on the consolidated income statement. To enhance year-over-year comparisons, the following table
summarizes, and the ensuing discussion describes, the self-storage operating results.